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If I buy a new condo in a new developmnt, am I in danger of losing $ if the othr apts dont sale.

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January 31 - Ballard
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Profile picture for daveskow
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Since October 2009

Its not so much that you will directly lose dollars .....its more of an issue that the property might  lose value  in the future  due to
* sellers dropping prices to sell
* potential borrowers having difficulty  buying due to tighter  lending  rules
* lenders  not being intersted in lending  on a property that is  highly vacant
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February 01
Profile picture for MikeEmery
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Since December 2008

Is this a new unit purchased directly from the builder, or is this a resale of an existing unit that may or may not have units still for sale from the builder.

If it's an resale of a unit in a building that no longer has units owned by the builder, there's less of a chance of losing value, but there is never any guarantee that the unit will lose value in the short term. Market conditions coupled with the number of foreclosures in a building may drive down values, at least in the short term.

If this is a new unit being purchased from the builder, how many units does the builder still own and how financially stable is the builder. The more units a builder is carrying in a development, coupled with financial instability can be a real recipe for disaster.

We have one project in Minneapolis where the builder has defaulted on the project with approximately 1/2 of the units sold. And a sub contractor had attached a lien on the project, which creates a 'cloud on title' which makes it difficult to sell units in the building. Plus the bankruptcy will most likely drive down the value of existing units as the bankruptcy trustee will be liquidating the units owned by the defunct builder.

Rely on the advice of a real estate agent with expertise not only in the area in which you are buying but also expertise in selling condominiums. Don't just rely on the sales agents for the project, their allegiance is skewed towards the developer.
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January 31
 

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